Tax relief for computer games companies should be brought back onto the agenda, according to MPs.

A report by the Scottish Affairs Committee said the industry was a potential world leader but it would benefit from better support.

While there were "compelling arguments" for tax relief benefits in the UK the investigation recommended the issue should be kept under review and monitored.

France and Canada were highlighted as countries which have benefited from giving computer game developers tax breaks.

Critics believe the system is weighted towards large multinational businesses and offers little value.

The committee's report said: "We recommend the possibility of introducing a tax relief be kept under review and the health of the industry be monitored for the potentially malign effects of uneven international competition.

"We recommend that the Government, meanwhile, undertake a full and comprehensive assessment to determine the benefits of such a relief, as well as examining those countries whose industries continue to flourish without government support."

Scotland is a major centre for the gaming industry while Abertay University in Dundee has built up a reputation as one of the best places to study.

However the sector suffered a blow last year when Realtime Worlds, one of the biggest gaming companies in Scotland, went into administration with the loss of more than 200 jobs.

The report said: "Scotland has an outstanding reputation for excellence in video games production, but in reality the sector is of great economic benefit to the whole of the UK.

"The innovative practices in place at the University of Abertay, such as workplace simulation, the level support given to graduates starting their own business and the level of cooperation with local industry should be replicated across the UK."

Other factors highlighted which could impact on the industry included a skills shortage, access to finance, poor marketing and a brain drain of talent abroad.

Dr. Richard Wilson, chief executive of industry body TIGA, said: "If the coalition government is serious about its intention of rebalancing the economy then it should invest in the UK video games industry by introducing games tax relief.

"This would create jobs, boost investment, power an export focused sector and generate much needed tax revenue for the government."

Morna Simpson, founder of networking group Girl Geeks Scotland, said: "We could be a global leader in this area but we need to create an ecosystem of investment and enterprise.